EPP Group Press Release
"The clear result strengthens the negotiation position of the European Parliament and is the guide for a good Directive proposal from the European Commission, which is expected for the end of 2010", said Othmar Karas MEP, Vice-Chairman of the EPP Group and European Parliament Chief Negotiatior on Basel III. The Karas Report on the EP’s position on Basel III was adopted yesterday in the Committee on Economic and Monetary Affairs with 38 votes in favour and none against.
"The Basel Committee, consisting of national supervisors and central bankers, doesn’t have the last, but the first word. Now it is about the implementation and political evaluation", said Karas.
As Chief Negotiator, Karas demanded: "Before the European Commission’s proposal on the Capital Requirement Directive is laid down on the table, the impacts of ‘The Bill’ in the US on CRD II, III and IV have to be examined. The decision to no longer regard external ratings for creditworthiness questions the entire agreement. I therefore ask the Basel Committee and the Commission to examine this discrepancy and inform the EP as soon as possible." MEPs stand behind the decision made by the Basel Committee, though many questions remained unsolved. "Especially the definition for equity capital considering the European banking sector, the recognition of minority interests and shareholding in insurances, hybrid capital, participation capital and supplement capital – all these issues have to be solved", Karas highlighted.
Karas called for an impact study on growth and employment. "In addition, the Commission has to present a study on the cumulative effects: pay-back of public funds, Basel III, deposit guarantee, bank levy and financial transaction tax", he continued. There are also big differences with the calculation systems. This problem has to be solved to harmonise accounting standards, at the moment the IFRS in Europe and GAAP in the US.
"Finally, we can only create a global level playing field if the US is willing to implement at the same time as Europe. There should be no competitive disadvantages for the European banking sector. The Parliament has a strong voice now", Karas concluded.
(Translation from original German)
